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Converting the Like into Sale

Date: 03/03/2016
Source: EY

Author: Constantin Măgdălina, Knowledge Management Senior, EY România

The time of the consumer who pays unconditionally what is offered is about to fall. He has become increasingly demanding. When a service / product displeases him he expresses himself in the space offered by social media. If he wants it better he comes forward with improvements.Companies are thus obliged to communicate relevant and timely with the consumer on this channel if they value him. The conversion of consumer’s attention into sale is not a simple task. Therefore building the relationship with him and promoting the products of companies products are in the reinventing process.

Measuring marketing activities on social media by companies is important if they target communication, promoting and sale campaigns with result. To better understand the impact of social media on the business environment,at EY Romania we have been conducting for 3 years the study akin. In this article we intend to present the results of the 2015 edition in comparison with the ones of the 2014 edition. This is only a selection of the analysis results collected from administration of a questionnaire comprising 28 questions answered by 270 representatives of major companies in Romania from 11 industries.

Here we present the main findings regarding the industries in which social networks are used, the allocated budgets and obtained benefits:

1. Social media is used mainly in marketing and communication - In general, the areas where companies use the social networks remain the same. The predominant use is in marketing and communication. Significant increases come from respondents who use social media for networking purposes (+13% in 2015 vs +6% in 2014). There is an increased number of companies using social media for recruitment (36% in 2015 compared to 34% in 2014). Some declines are in sales (-1%) and client service (-6%) areas.

2. Only few industries use social media for sale - Although communication is the main area of social networks use regardless of industry, the aim of selling through social media appears especially for the companies in tourism (100% of respondents), followed by companies in retail & wholesale industry and food industry/agriculture (60% of respondents each). 56% of respondents in banking and financial industry use social networks for recruitment, followed by companies in advertising/media (35% of respondents) and IT&C industry (30% of respondents).

3. Social media is mostly used by small companies for sale purposes - The use of social networks for selling purpose is encountered primarily in small companies, under 50 employees (42% of respondents) and in companies with 501-1000 employees (38% of respondents). The companies with more than 1000 employees report the largest number of respondents using social networks for recruitment purposes. Regardless of company size, social networks are used specifically for communication and marketing.

4. Social media generates especially awareness for companies - Increasing awareness and exposure to the market are the most important benefits of social networks; 53% of respondents say that using social media generated sales opportunities and 37% of respondents had an actual increase in sales (+3% compared to 2014). Although on decrease compared to previous year, nearly half of respondents indicate customer loyalty as a benefit obtained by using social networks.

5. There are also companies that make pre-qualification opportunities through social media 59% of respondents say they influence prospecting and identifying sales opportunities through social networks, 41% say they can pre-qualify the opportunities by collecting information and 35% can support online offering through online chats/discussions and demonstrations about products or services offered. In contrast, 18% of the companies say they do not use social networks in the process of selling, a higher percentage compared to 2014.

6. Six out of ten companies say it is effective generating leads through social media - 64% of respondents agree with the statement that generating sales opportunities on social networks is an effective approach, but 30% are undecided on this. Significant lower percentages are recorded for those who disagree that generating sales opportunities is effective on social networks

7. However, the leads are generated in particular by large companies in social media - Companies with turnover between EUR 50-100 million indicate the highest efficiency in generating sales opportunities. High efficiency in sales is reported by small size companies, with turnover of up to EUR 10 million, for which social channels are the most effective method of attracting potential clients.

8. Tourism, food industry and trade are the industries that sell the most through social media - The top three industries that report increased sales through social networks are tourism (100%), food (60%) and retail & wholesale trade (50% of respondents). The respondents from tourism industry are reporting customer loyalty as a benefit, which is also reported by companies in retail and wholesale (70%), as well as in pharmaceutical industry (58%). 75% of respondents from tourism appreciate as positive the impact of social media on employer branding, followed by banking and financial industry (56%) and retail & wholesale industry (50%).

9. In general, companies have small budgets for social media - The largest budgets, of over EUR 10,000 per year, are allocated by the banking and financial services industry (25% of respondents), retail & wholesale, IT&C, and advertising/media sectors (11% each), as well as by companies in production sector (7% of respondents). At the same time. 33% of respondents from banking and financial services and energy/utilities industry say they do not know what was the budget invested in the promotion on social networks, which supports the idea of budgets being shared across multiple departments.

10. Listening to the views of the consumers in social media is just at the beginning - From the perspective of the sectorial analysis of the respondent companies it is easy to notice that the companies most connected to consumers’ opinion expressed in social media are those in tourism. In the next period of time, the investments in implementing social listening tools will come from IT&C (55% of respondents), retail & wholesale (50%), advertising/media (44%), and pharmaceutical industry (42% of respondents).

Social media changes the consumer’s relationship with the product and supplier. Nowadays the consumer claims the role of a partner in generating products/services models due to the experience they had if he/she cares about brand. Most easily accessible environment for consumer input, social media becomes an incubator of ideas for product development function of the companies. Beyond idea co-generation social media can also convert marketing activities into sales. The conversion rates of marketing and the relevance of sale vary by industry, but always strengthens the company’s soft power.

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